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OpenAI Staff Threaten Mass Exodus to Join ex-CEO Altman

OpenAI shocked the tech world when it fired former CEO and co-founder Sam Altman. JUSTIN SULLIVAN / GETTY IMAGES NORTH AMERICA/AFP/File
OpenAI shocked the tech world when it fired former CEO and co-founder Sam Altman. JUSTIN SULLIVAN / GETTY IMAGES NORTH AMERICA/AFP/File
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OpenAI Staff Threaten Mass Exodus to Join ex-CEO Altman

OpenAI shocked the tech world when it fired former CEO and co-founder Sam Altman. JUSTIN SULLIVAN / GETTY IMAGES NORTH AMERICA/AFP/File
OpenAI shocked the tech world when it fired former CEO and co-founder Sam Altman. JUSTIN SULLIVAN / GETTY IMAGES NORTH AMERICA/AFP/File

Hundreds of staff at OpenAI threatened to quit the leading artificial intelligence company on Monday and join Microsoft, deepening a crisis triggered by the shock sacking of CEO Sam Altman.
In a fast-moving sequence of events, Altman, who was ousted by the board on Friday, has now been hired by Microsoft where he will take the lead in developing a new advanced AI research team, AFP said.
There was talk Monday that OpenAI is interested in Altman returning, and that he may be open to the idea under certain conditions.
"We want to partner with Open AI and we want to partner with Sam so irrespective of where Sam is he's working with Microsoft," chief executive Satya Nadella said in a streamed Bloomberg interview.
"That was the case on Friday. That's the case today. And we absolutely believe that will be the case tomorrow."
In a letter released to the media, the vast majority of OpenAI's 770-strong staff suggested they would follow Altman unless the board responsible for his departure resigned.
"Your actions have made it obvious that you are incapable of overseeing OpenAI," the letter said. "Microsoft has assured us that there are positions for all OpenAI employees at this new subsidiary should we choose to join."
A key AI executive at Microsoft confirmed that they all were welcome from OpenAI if the board that removed Altman doesn't resign.
Among the signatories was co-founder Ilya Sutskever, the company's chief scientist and a member of the four-person board who pushed Altman out.
"I deeply regret my participation in the board's actions," Sutskever said in a post on X, formally Twitter. "I never meant to harm OpenAI."
Another signatory was top executive Mira Murati, who was appointed to replace Altman as CEO when he was removed on Friday, but didn't last the weekend in the job.
"We are all going to work together some way or other, and I'm so excited," Altman said on X.
OpenAI has appointed Emmett Shear, a former chief executive of Amazon's streaming platform Twitch, as its new CEO despite pressure from Microsoft and other major investors to reinstate Altman.
After the startup's board sacked Altman, US media cited concerns that he was underestimating the dangers of its tech and leading the company away from its stated mission -- claims his successor has denied.
Nadella wrote on X that Altman will lead a new advanced AI research team at Microsoft, joined by OpenAI co-founder Greg Brockman.
Global tech titan Microsoft has invested more than $10 billion in OpenAI and has rolled out the artificial intelligence pioneer's tech in its own products.
Nadella said Microsoft remains committed to its partnership with OpenAI.
The drama was the talk of Silicon Valley on Monday.
"I know that some people are going to hate me for this, but this is the best show I've seen in my life," added Miguel Fierro, the tech giant's Principal Data Scientist Manager.
Altman shot to fame with the launch of ChatGPT last year, which ignited a race to advance AI research and development, as well as billions being invested in the sector.
His sacking triggered several other high-profile departures from the company, as well as a reported push by investors to bring him back.
But OpenAI stood by its decision in a memo sent to employees Sunday night, saying "Sam's behavior and lack of transparency... undermined the board's ability to effectively supervise the company."
'Badly' handled
Shear confirmed his appointment as OpenAI's interim CEO in a post on X on Monday, while also denying reports Altman had been fired over safety concerns regarding the use of AI technology.
"It's clear that the process and communications around Sam's removal has been handled very badly, which has seriously damaged our trust," Shear wrote.
Generative AI platforms such as ChatGPT are trained on vast amounts of data to enable them to answer questions, even complex ones, in human-like language.
They are also used to generate and manipulate imagery.
But the tech has triggered warnings about the dangers of its misuse -- from blackmailing people with "deepfake" images to the manipulation of images and harmful disinformation.

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Technology

OpenAI Outlines New For-Profit Structure in Bid to Stay Ahead in Costly AI Race

The OpenAI logo is seen in this illustration taken May 20, 2024. (Reuters)
The OpenAI logo is seen in this illustration taken May 20, 2024. (Reuters)
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OpenAI Outlines New For-Profit Structure in Bid to Stay Ahead in Costly AI Race

The OpenAI logo is seen in this illustration taken May 20, 2024. (Reuters)
The OpenAI logo is seen in this illustration taken May 20, 2024. (Reuters)

OpenAI on Friday outlined plans to revamp its structure, saying it would create a public benefit corporation to make it easier to "raise more capital than we'd imagined," and remove the restrictions imposed on the startup by its current nonprofit parent.

The acknowledgement and detailed rationale behind its high-profile restructuring confirmed a Reuters report in September, which sparked debate among corporate watchdogs and tech moguls including Elon Musk.

At issue were the implications such a move might have on whether OpenAI would allocate its assets to the nonprofit arm fairly, and how the company would strike a balance between making a profit and generating social and public good as it develops AI.

Under the proposed plan, the ChatGPT maker's existing for-profit arm would become a Delaware-based public benefit corporation (PBC) - a structure designed to consider the interests of society in addition to shareholder value.

OpenAI has been looking to make changes to attract further investment, as the expensive pursuit of artificial general intelligence, or AI that surpasses human intelligence, heats up. Its latest $6.6 billion funding round at a valuation of $157 billion was contingent on whether the ChatGPT-maker could upend its corporate structure and remove a profit cap for investors within two years, Reuters reported in October.

The nonprofit, meanwhile, will have a "significant interest" in the PBC in the form of shares as determined by independent financial advisers, OpenAI said in a blog post, adding that it would be one of the "best resourced nonprofits in history."

OpenAI started in 2015 as a research-focused nonprofit but created a for-profit unit four years later to secure funding for the high costs of AI development.

Its unusual structure gave control of the for-profit unit to the nonprofit and was in focus last year when Sam Altman was fired as CEO only to return days later after employees rebelled.

'CRITICAL STEP'

"We once again need to raise more capital than we'd imagined. Investors want to back us but, at this scale of capital, need conventional equity and less structural bespokeness," the Microsoft-backed startup said on Friday.

"The hundreds of billions of dollars that major companies are now investing into AI development show what it will really take for OpenAI to continue pursuing the mission."

Its plans to create a PBC would align the startup with rivals such as Anthropic and the Musk-owned xAI, which use a similar structure and recently raised billions in funding. Anthropic garnered another $4 billion investment from existing investor Amazon.com last month, while xAI raised around $6 billion in equity financing earlier in December.

"The key to the announcement is that the for-profit side of OpenAI 'will run and control OpenAI's operations and business,'" DA Davidson & Co analyst Gil Luria said.

"This is the critical step the company needs to make in order to continue fund raising," Luria said, although he added that the move did "not necessitate OpenAI going public."

The startup could, however, face some hurdles in the plan.

Musk, an OpenAI co-founder who later left and is now one of the startup's most vocal critics, is trying to stop the plan and in August sued OpenAI and Altman.

Musk alleges that OpenAI violated contract provisions by putting profit ahead of the public good in the push to advance AI.

OpenAI earlier this month asked a federal judge to reject Musk's request and published a trove of messages with Musk to argue that he initially backed for-profit status for OpenAI before walking away from the company after failing to gain a majority equity stake and full control.

Meta Platforms is also urging California's attorney general to block OpenAI's conversion to a for-profit company, according to a copy of a letter seen by Reuters.

Becoming a benefit corporation does not guarantee in and of itself that a company will put its stated mission above profit, as that status legally requires only that the company's board "balance" its mission and profit-making concerns, said Ann Lipton, a corporate law professor at Tulane Law School.

"The only reason to choose benefit form over any other corporate form is the declaration to the public," she said. "It doesn't actually have any real enforcement power behind it," she said.

In practice, it is the shareholders who own a controlling stake in the company who dictate how closely a public benefit company sticks to its mission, Lipton said.